How To Select Your Payment Provider

First Marketplace Payment Provider Considerations

Today we will be going to dive into marketplace payment providers and different payment providers that can be set up.

So, the payment provider capability within a marketplace eCommerce platform is a key requirement because, depending on the marketplace, the sellers may need to have multiple different forms of payment or different sellers may need to have different payment providers that they have to process their payments. With that in mind, this provides a flexible solution to your sellers with what payment provider works best for them.

In addition, it's also possible that the marketplace itself may want to employ a really specific payment strategy. For instance, when somebody goes to checkout their card is pre-processed, making sure that the card has funds on it but without actually capturing the funds. The funds might not get captured until fulfillment occurs or in some cases until the actual delivery is made.

Data Security & Validation Practices

All of that to say, these are important considerations when you're looking at the different payment providers because some of them have capabilities built-in and some of them do not. You will want to address that early on as they typically are looking for security validation, PCIDSS compliance (payment card industry data security standard), and for the payment provider to not pass secure information over the wire that isn't SSL and Chrome 58. Nowadays, you're wanting to make sure that the information is tokenized and validated while not being stored within your application.

When it comes to the many nightmare scenarios of credit card information insecurity, we’ve come across a number of more troubling cases. In example, we were brought into a project where this information had been stored in different folder applications which were plain text files. So, if you can imagine the database were compromised somehow or the application was breached, then that database with plain text credit card information could be used to utilize those credit cards.

These are things that you want to consider when you're evaluating a marketplace platform:

• How to the store that data?
• How do they prevent it from getting into the wrong hands?
• Are there multiple levels of security instead of just a single layer?

The list goes on when it comes to data security, but these are the first few questions you will be needing to answer when making a final decision on a solution.

Now when it comes to multiple payment providers, as you can imagine, you have to be able to deal with all of these considerations that we just mentioned, but now for multiple different payment providers. Will the platform you select be able to handle that? Make sure that they have a valid configuration for their different requirements that your platform is architected so it can handle the needs of your sellers.

A lot of marketplace implementations that we've done in the past have incorporated the need for a different payment provider by location per seller. Some sellers will have different locations to each require a different payment provider and those might be the same provider themselves but with different pretenses.

Escrow Payments, Clearinghouses, & Payment Validation

So, the question would be now as you're evaluating this need is which of the payment providers do you expect to use within your marketplace. Many clients don't necessarily have a selected payment provider and in that case, we like to ask questions about whether or not they need to do complicated things down the road like escrow payments upon validation of the items. In other words, the buyer actually puts a payment into escrow, the payment provider serves as a clearinghouse if you will, validating that the payment went through. Then they put the funds into an escrow account physically locking those funds up, capturing them and making sure they are not available to the seller until the items have arrived at the buyer and the buyer has verified, “Yes, I approve. These items are what I ordered”. This is something that confirms for the buyer that they're going to get the quality and the expected item. With a lot of international marketplaces this can be a major concern for the buyer. As a marketplace platform, enabling the right governance for your marketplace you will want to leverage a payment provider that has something like an escrow option.

How Can Clarity Help?

So, it's not a bad idea to go and talk to some of these folks (vendors and sellers) that you're going to be interacting with and spend time with them discussing their business. Especially as it pertains to payments and how they would see filling and completing these orders. There's nothing better than getting that direct interaction with them.

Certainly, we're happy to help collaborate and even facilitate some of those conversations with you and your team. So, we welcome you to reach out to us at Clarity, we definitely have experience with a lot of different scenarios with marketplaces and can help guide you down that path. We provided links below leading to a list of growing resources specifically talking about marketplaces and there many features.